Tax Structure in India
India being as a democratic country comprised of well structured taxation department that categorized into state government, central government and local bodies. All those taxes that levies on service tax, central excise and customs duties lie under Central Government and those levies on profession tax, VAT, state excise, stamp duty and land revenue lie under State Government and those levies on utilities like water supply, drainage etc, tax on properties and octroi lie under local bodies.
Since independence number of reforms and amendments have been placed under Indian tax structure. For better enforcement and best collection of tax and easy to pay off by the society numerous initiatives have been made in respect of tax rates and tax law slab.
Direct Tax - For direct taxes is typical that they have a direct link to the creation of value and profit natural and legal persons. The taxpayer is in direct taxes addressed. Indirect taxes are tied to different kinds of products or services. Indirect taxes to the taxpayer always end consumer.
Income Tax - As per the Income Tax Act 1961 all those candidates and residents who are having income more than exemption level can pay off their income tax as per the income tax slab. Tax structure in India is very simple but also strict in respect of implementation of tax policies. Income tax is charged separately for each year on annual basis.
Sales Tax / VAT - On 1 April 2005, Indian tax structure imposed another segment of tax named Value Added Tax. VAT is imposed on goods that replaced sales tax. Whereas other indirect taxes including service tax, excise duty is charged in the same manner that do not replaced by VAT. This type of tax is charged at the state level under the supervision of state government.
Excise Taxes - They are selective taxes on certain types of products such as tobacco, alcohol and spirits, beer and wine, hydrocarbon fuels and lubricants. Excise taxes are similar in nature VAT. They are indirect taxes; it means that the taxpayer is the consumer. Excise tax payers are all natural and legal persons in the country producing quality products and which are to be exported or delivered goods sold. It is usually fixed amount per unit of quantity and billing is similar to VAT.Below is the list of taxes that are being levied under the slab of Indian tax structure.
- Direct Taxes
- Tax on Corporate Income
- Excise Duty
- Personal Income Tax
- Capital Gains Tax
- Indirect Taxes
- Tax Incentives
- Taxes on Corporate Income
- Customs Duty
- Service Tax
- Securities Transaction Tax
- Double Taxation Avoidance Treaty
- Sales Tax/VAT